DuPont Decomposition
Why does INDIANHUME earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
40.5% = 37.5% × 0.54 × 1.99
Latest: FY2025
Profitability
Net Margin
37.5%
3.5% →37.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.21x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.99x
3.14x →1.99x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 38.2 pp over 3 years. Driven by net margin improving (3.5% → 37.5%), asset turnover improving (0.21x → 0.54x), leverage falling (3.14x → 1.99x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 0.21 | 3.14 | 2.3% |
| FY2024 | ₹0Cr | ₹0Cr | 10.8% | 0.19 | 2.51 | 5.3% |
| FY2025 | ₹0Cr | ₹0Cr | 37.5% | 0.54 | 1.99 | 40.5% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.